BAKU - Costs on the multibillion dollar Shah Deniz gas pipeline are expected to jump by a quarter from original calculations, the head of the BP-led project said in the Azeri capital on Friday.
"On March 31 the projects final cost figures will be announced. They are expected to go up by about 25 percent which makes a total of about 4.1 billion dollars (3.05 billion euros)," Robert Kelly, who heads the Shah Deniz project, told journalists.
Shah Deniz project officials have blamed the cost overrun on a falling dollar, growing wage expenditures and rocketing oil prices, which have increased transport costs.
A consortium of oil companies including BP of Britain, Statoil of Norway, Total of France and a number of others has spent 2.1 billion dollars on the 3.2-billion-dollar project to date.
The project also involves building a 690-kilometre (420-mile) pipeline to export the gas from Azerbaijan, via neighbouring Georgia, to eastern Turkey.
The pipeline -- which is expected to carry 6.6 billion cubic meters (231 billion cubic feet) of gas per year to the Turkish city of Erzerum when it reaches capacity -- is just over half-way completed, Kelly said. Its launch is expected in late 2006.
03/11/2005 15:57 GMT